Stock market falls on China lockdown concerns

Yahoo Finance’s Jared Blikre breaks down how markets opened on Monday.

Video transcript

BRIAN SOZZI: Yahoo Finance's Jared Blikre is standing by for us down at the New York Stock Exchange. Jared, happy Monday to you.

JARED BLIKRE: Happy Monday, but starting the week on a downbeat. In fact, ending last week on an even downer beat. Looking at the S&P 500 here, here is the last two months. Yesterday, I would say Friday, that session should not have happened. We're looking at a big sell-off here. And it looks like we're going to test these lows from earlier in March. And you take a look at a year-to-date chart. Could easily, easily test these lows right around 4,100, let's say. And let's consider the possibility that we go down from there.

Got some words from Mike Wilson, friend of the show that we can get into a little bit. But first, let's take a look at the VIX, which is right back up to 29. We've been talking about the elevated volatility not only in the market-- not only in the stock market, but also in the bond market. So here is the MOVE index. This is as of the close last Friday. But you can see very much consolidating in a bullish wedge formation, probably looking at higher volatility in the bond market.

So here's the 10-year T-note yield, and we can see that is down nine basis points. So that should give a little bit of an edge to the growth stocks, but not necessarily seeing that this morning. In fact, we're seeing all of the sectors, except for communication services, which houses Twitter, by the way, in the red. Energy is the biggest loser to the downside. That's down over 3 and 1/2%, followed by financials, materials, industrials, all of those underperforming.

You can see staples also flashing a little bit of green right there. But let's take a look at some of the components, some of our leaders here. We see ARK Innovation. That's up over 1 and 1/2%. We got Liquid. That's a bond fund. We got chip stocks a little bit in the green. But for the most part, looking like a lot of red here, guys.

JULIE HYMAN: And there is a strategist who we talked to recently from Wall Street who thinks that red is going to continue. I'm talking about Mike Wilson of Morgan Stanley, who put forth early on a fire and ice hypothesis that that's how the rally was going to end. I think he's leaning ice, right?

JARED BLIKRE: Yeah, well, I'll tell you what, it's been a few years from the "Game of Thrones" ending. Maybe they're going to bring it back, but Mike is a little bit concerned about the market. I just want to read a couple of words from him. In our opinion, the accelerative price action on Thursday and Friday-- that's when we saw that big reversal off of those Powell comments-- may also support the view that we are moving to this much broader sell-off phase. And we think Friday, in particular, appears indicative of what to expect next. Lower beta defensive stocks outperform, but they still go down.

I'm going to skip to the end here. Some of the reversals in the base metal stocks have been eye popping, with most securing outside reversal patterns on a weekly basis. To us, this signifies the market's realization that we are now entering the ice phase, and that growth will be the primary concern from stocks here, rather than inflation, the Fed, and interest rates.

Just want to show you guys on the YFi Interactive what is happening in the futures market right now. Palladium down 10%, crude oil down 5%. That's the WTI Brent, very similar. RBOB gasoline futures down 4%. So not only the material stocks, but the futures themselves are-- it looks like they're correcting right now, guys.

BRIAN SOZZI: Interesting call from Mike Wilson. Of course, we had him on last week. He was a big fan of my fluffy puppy economic indicator. That story is now on the yahoo.com homepage. Jared Blikre, talk to you later.